NRI Investment in India via Mutual Funds

Many groups of people can invest in mutual funds. However, there is always a question: Can NRIs invest in mutual funds in India? Of course, NRI’s can easily invest in mutual funds in India. They can invest in Indian Mutual Funds on a repatriation basis with NRE account as well as a non-repatriation basis through NRO account. However, they need to follow the guidelines of the Foreign Exchange Management Act (FEMA).

Requirements for Mutual Fund Investment in India For NRI investment in India, self-attested photocopies of below will be required:

A recent passport size photograph

Updated PAN card

Certified copy of passport

PIO/OCI card

Residence proof of outside India and permanent address proof (it can be of any foreign nation).

One month bank statement of account you are going to use for investing purpose.

This is for the purpose of KYC and further, in-person verification is also required. It is done using Groww (an AMFI recognized distributor) over a video call which is especially for NRIs.

NRI Investment Options in India

There are various kinds of NRI investment options in India.

Invest in any of the India-focused offshore mutual funds or ETFs which are present in the home country of the investor. These schemes invest in a diversified basket of Indian companies wherein the benefit is that you can invest in your own currency. However, there can be chances of heavy entry load to investors.

The option of investing in mutual funds domiciled within India, through their NRE or NRO account. There is no any entry load, but the investment needs to be done in rupees. NRI investors should take care of exchange rate risk. Also to be noted if you are based in the US or Canada, there are certain funds in which you cannot invest.

Benefits of NRI Investment in India

While doing mutual fund investment in India, there is an advantage of rupee depreciation provided the investment is through NRO account.

Another benefit is that they can easily manage mutual funds via online apps from anywhere.

Tax implications for NRI investment in India

For NRIs, tax law of India will be applicable on income earned. However, taxes which you will have to pay will depend upon the laws of the country you reside in. India has Double Tax Avoidance Treaty with 88 countries in which USA and Canada are also the part. According to this, if you are a USA based investor, in case of short-term capital gains, you will have to pay 15% tax in India. In the USA, the tax rate is 30% for the same gain. However, you just need to pay the difference in the tax rate in the USA.

Facts regarding Mutual Fund Investment in India

The compliance requirement in the US and Canada is very strict. Thus, as per the FATCA guidelines, all financial institutions have to mandatorily share the details of financial transactions involving a US person with the US Government.

For mutual fund investment in India, there are two schemes available - buy securities listed or traded in overseas exchanges, or invest in other overseas Mutual Fund schemes that have such securities in their portfolio.

Mutual funds in India have to follow SEBI guidelines, even if the investment is done in overseas securities. Hence, if we put it simply, the investment process for an NRI is not so complex and they can get good returns. These reasons are enough for NRI investment in India wherein they can enjoy the benefits of various schemes.

In this article given reasons are enough for NRI investment in India wherein they can enjoy the benefits of various schemes. Visit us Mutual Funds Sahi Hai

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